Financial freedom is achieved when you have created enough wealth and/or cash flowing assets to live on and no longer need to depend on a paycheck as an employee. You are then financially free from a job, a boss, and a company.
There are many ways to make a living in the 21st century other than a job. While it is a necessity to have a job to pay bills for most people when they start out in life and leave their parents home it doesn’t have to be that way for the rest of your life. Jobs are tools for earning the money you need to pay your bills but don’t have to be a life sentence if you don’t love your job.
All the jobs in the private sector of the economy are from businesses. There is the other side of the table an employee can eventually convert to over time. You can be an investor and buy the stock of publicly traded companies to benefit from the earnings, sales, and revenue that employees work hard to achieve. You can also trade stocks to benefit from the price action of the trends and swings in the stock market. You can start your own business and benefit from your own labor and even from the work of your own employees. You can create your own job through self employment where you remove yourself from the corporate pyramid scheme and your new boss becomes your customers.
Employee is not the only path just one of many ways to make a living. When you transition to trader, investor, self employed, business owner, author, or real estate investor you are still working but you are working for yourself and cutting out the middleman of a boss and a company.
Money has principles and rules for where it flows. Where ever you start out in life there are quantified things you can do to create wealth and cash flow. Money flows from people who do not know how to manage it and to people that do. Money seeks returns through investments in stocks, businesses, bonds, and people.
Here are 40 steps to financial freedom that lead you to earn more, keep more of it, and put the money to work for you instead of you working for money.
Your Financial Future
1. What are your financial goals? You have to plan your future.
2. Look for a mission in life not a job.
3. Your spouse is your lifetime financial partner. Choose wisely.
4. Work for personal growth not just for money.
5. You get paid on the value you create not what you think you are worth.
6. Your net worth is the difference between your income and your spending.
7. You need a budget or self-control.
8. What is your time and energy worth? Only work jobs that are worth the pay.
9. Buy things that you value the most, do not buy for appearances to impress other people.
10. Do you enjoy the way you earn a living? If not you are in the wrong job.
Low Stress Finances
11. Your standard of living should reflect your earnings power not your desires.
12. Save enough money for Murphy’s law.
13. Use credit and debt to buy assets not liabilities.
14. The Power of ‘F@ck You Money’. Always be able to quit and seek other opportunities.
15. Save 10% of your gross income.
16. Put your money to work.
17. Money flows from those who can’t manage it to those who can.
18. Do not put money in things you don’t fully understand.
19. The fastest way to go broke is to try to get rich quick.
20. Insurance is financial defense.
Building Wealth
21. Pay yourself before anyone else.
22. The 100% return most employees are missing: 401K matches.
23. The hidden expense of taxes. Optimize for tax liability.
24. High income is not the same as wealth.
25. Looking rich is not the same as being rich.
26. What creates wealth? Creating value for others or partnering with those who do.
27. The stock market is a wealth builder.
28. Home ownership can be a wealth builder.
29. Always consider the risk and the reward in any endeavor.
30. Invest in your knowledge and skills through education in whatever form that takes for your goals.
31. Know your net worth.
Financial Freedom
32. Fire your boss if you hate your job. There are other jobs and ways to make money.
33. You can’t ‘take it with you’ but you can enjoy freedom now when you have enough money.
34. Build a business versus having a job.
35. Plan for retirement as early as possible.
36. There are other ways to make money besides a job.
37. When cash flowing assets are greater than bills you are free.
38. If you didn’t have a job what would you do? Whatever you wanted.
39. Use capital to buy your time back.
40. The greatest luxury item is financial freedom.
Financial freedom happens the day that you have enough money to walk away from your job and do whatever you want. You don’t need enough money to do nothing, you just need enough money to do whatever you want.
I cover these principles and much more in my new book ‘The Working Dead’.
